Wednesday, December 22, 2010

MYTH OF NET NEUTRALITY

Time for a bit of policy discussion. I’m calling it The Myth Of Net Neutrality. Let’s start with this premise; Joe the Plumber isn’t building out the broadband networks. Neither is Joe Six Pack, and probably not you or me. Unless we’re stockholders in Comcast, Verizon, Sprint, Verizon, Time Warner—take your pick, then you might have a financial interest.

Secondly, this is not a new argument, that broadband internet providers need to ‘loosen up’ their content rules, let all content providers have total, free access and charge no fees to favored providers. Call it ‘pay for shelf-space' broadband politics. No, the argument goes, internet providers shall not discriminate content to back shelves, the warehouse, the parking lot, the tent sale of stored content. The ‘Free The Net’ T-shirt crowd has been harking for decades, going back ten to fifteen years at least in the City of Los Angeles, the State of California, where elected officials voiced concerns that a digital divide would freeze broadband spending on less affluent neighborhoods in Southern California. It sounded plausible at the time, except that the providers that were building the new broadband networks were essentially prohibited from this feared practice by cable television franchise requirements that all neighborhoods be built out in good time. No good to pick the low-hanging fruit of wealthy early adopters, while squeezing out poor districts. But it made for good copy in the papers and it’s always fun to razz the cable operators who provided so-so customer service while concentrating the bulk of their resources in the technology.

Back in the day, there were limited ways to access the internet. Pretty much it was a low-quality dial-up phone company modem service competing with hi-speed cable broadband modems. Now, that’s pretty much a quaint provincial notion, at most.

With iPads, iPhones, 4G networks, broadband providers coming from all angles (Comcast, Time Warner, Verizon/Sprint/T-Mobile/Clear, the list goes on) the medium is ‘not the message’ anymore. Content is King. The argument, now, goes like this; Broadband providers need to insure that they aren’t restricting the ‘free’ travel of their programming sources, and only allowing proprietary content, or worse--charging exorbitant tariffs/fees to let freedom ring, literally.

Here’s where the business of the business gets real. To fund the build out of networks like 4G wireless, high-speed broadband, wireless towers on every corner so texting/messaging/iPhone access is ubiquitous and seamless, takes an enormous amount of money. It’s an investment that often times doesn’t see any return for five, ten years. Yet these investments are made, calculated for rate of return, added value tacked on so users will be lured over to one provider or another.

Sound easy? You’re wrong. Think of the tower sites alone. Those tree-like structures that seemingly grow like real ones, pack the electronics to send your critical text message while you speed along on the freeway. Your GPS, your lifeline services interfacing in one or two vehicular devices require thousands of cell sites to keep your roaming digital life a-pumping. Tower sites require all kinds of permits, long term land leases, payments, locked in rates. There is nothing cheap or easy about just the tower site business alone.

The FCC was essentially created to oversee the broadcast networks, allocate frequencies to ABC, NBC, CBS, and to monitor and regulate other frequencies like police, fire, military (to some degree) and maritime ship-to-shore. These frequencies in the analog age were separated by a finite degree of bandwidth, to prevent ‘bleed’ into other user’s transmissions. The digital age puts an end to frequency bleed, analog drift. The micro-metric digital allocation means that television stations not only broadcast on a primary HDTV frequency, but are now digitizing side-band frequencies as well. The result is a mega-mall of divided spectrum space, all digitized and sanitized so every user of radio frequency has more than enough to transmit all kinds if exciting new services and products.

The internet take this a step further, with an essentially infinite amount of servers delivering digitized content worldwide, without the use of radio frequencies at all.

So why is the FCC in the business of regulating internet content at all? Because they can. Because they allow themselves to get used in the fight against what they deem the control of the internet by a handful of huge mega-media providers.

They are right, to an extent.

Mega-media companies operate on the ‘Field of Dreams’ principle, constantly asking the question, ‘If we build it, will they come?’ The FCC operates on the principle stated in the classic movie, ‘Jaws’; ‘We’re gonna need a bigger boat’.

Broadband providers fight constantly for customers, features and benefits playing like movie trailers, low sultry voices and hot young bodies glistening for your broadband/wireless entertainment dollar. Don’t think for a minute that profit and loss doesn’t drive these campaigns. Absolutely they do. Companies are also mindful of competition and the pricing structures, keeping it real even if they don’t want to. Charge content providers an exorbitant or unfair tax or surcharge to gain access to the pipe, they run the risk of content companies (and I know some are vertically integrated) saying, No Thanks. Taking their business elsewhere.

There is no deliberative body, domestically or internationally, regulating internet content, space allocation, site names, the number of servers, or the proliferation of web commerce.No one, worldwide. Ever hear someone complain, I needed a business website but they were all gone? Won’t happen.

Until there's an end in site to broadband spectrum, and there won’t be in our lifetime, the FCC’s business should be monitoring traffic for threats against the country, child porn predators, illegal drug and arms traffic. Stay out of the business of broadband network investment, stop pretending to be the traffic cops of content providers and the arbiter of digital shelf space.

After all, nobody complains that Coca Cola pays premiums to display their goods every day in supermarkets throughout the country. Is that a bad thing? I submit that it isn't.

2 comments:

Well, not convinced that corporations are our friends, particularly the big public utility types. Expensive infrastructure, so very few players. I may be slightly paranoid, is that like slightly pregnant?, but I can see an entirely unspoken "gentleman's agreement" that it is in the best interests CEOs to not compete on the basis of price, just the number of movies you can record on the dvr, etc.

We regulate electric utilities, gas utilities, water, telephone to see that the majority of the public is served. Those are all high investment businesses, essential to the public. Left unchecked, they tend to act like monopolies. There is that famous saying about electric utilities: "all power corrupts".

"They" are watching! At the very moment I was posting my prior slightly jaundiced view of corporations and public utilities, a large unauthorized cramming charge was being posted to my phone bill. "the 1996 communications act forced us to accept these 3rd party charges" says the phone company. All I can say is that if someone phones you, and mentions Encino, CA and particularly - if they have anything to do with 16133 Ventura Blvd, Suite 855, Run, Run, Run away as fast as you can. Under no conditions say yes to anything.